EDITORS: Please do not use
"Pacific Gas and Electric" or "PG&E" when
referring to PG&E Corporation or its National Energy Group.
The PG&E National Energy Group is not the same company as Pacific
Gas and Electric Company, the utility, and is not regulated by the
California Public Utilities Commission. Customers of Pacific Gas
and Electric Company do not have to buy products or services from
the National Energy Group in order to continue to receive quality
regulated services from Pacific Gas and Electric Company.

PG&E COMMENTS
ON DWR REVENUE DEMAND

SAN FRANCISCO - Pacific
Gas and Electric Company today issued the following statement on
the state Department of Water Resources' (DWR) thrice-revised Revenue
Requirement, which it filed last week with the California Public
Utilities Commission (CPUC):

"Based on the limited information
provided by DWR, Pacific Gas and Electric Company believes DWR has
substantially overestimated the forecast cost of spot power purchases,
and substantially overestimated the forecast cost of natural gas.
These overestimates combine to make DWR's 2001-02 revenue requirement
more than $3.1 billion higher than it would be if estimates which
reflect the current market realities, rather than financial or political
considerations, were used. More than $1 billion of this apparent
'padding' of the revenue requirement has been assigned to PG&E's
customers; the other two utilities' customers are assigned the remaining
$2 billion.

"Despite repeated requests
for information as to how DWR came up with its numbers, department
officials continue to refuse to give the public the information
needed to understand and analyze its revenue demand.

"Pacific Gas and Electric
Company and others have asked DWR to host public evidentiary hearings,
as required under state law. The department recently refused to
hold its own public hearing, claiming the CPUC regulatory proceeding
is addressing public concerns over its revenue demand. Yet in that
very same CPUC regulatory proceeding, DWR has rejected requests
for any type of CPUC-sponsored public hearings, claiming it is exempt
from any further review by the public or the CPUC regarding the
basis or reasonableness of its request or costs.

"Due to the lack of information
submitted by DWR, PG&E is able to make only limited estimates of
how DWR developed its revenue requirement, and can only guess as
to whether it is accurate.

"The continuing difficulties
in understanding DWR's revenue requirement estimate reinforces the
need for the revenue requirement to be developed in an open forum
which has process rights for the participants, including full access
to the information DWR is using to develop its estimates. At issue
are up to $68 billion dollars of costs to utility consumers for
years to come, $13 billion in 2001 and 2002 alone. This works out
to an average of $6,800 for each of the 10 million electric customers
within the service areas of PG&E, Edison and SDG&E. Pacific Gas
and Electric Company continues to urge that DWR's revenue requirement
receive the appropriate level of public comment and review prior
to adoption and inclusion in rates. DWR has refused PG&E's request
for hearings, and the current CPUC 'rush to judgment' does not provide
for such hearings or public comment."